Category Archives: Obamacare fines

Already, the fear-mongers are sounding the alarm: If you don’t purchase exactly the type of health insurance that the Affordable Care Act (ACA) requires, come tax-time the IRS will slap you with a stiff penalty.

As I explain in the post below, the ACA mandates that if you’re not already covered, you must buy insurance that includes “essential benefits” such as hospitalization, maternity and newborn care, and mental health services. Ignore the mandate this year, and you will be fined when you file your taxes next year.

How Much Would You Owe?

If you opt out of purchasing insurance that covers you and your family in 2015, the penalty will equal Either:

a flat dollar amount, of $95 per uncovered adult and $47.50 per child, up to a maximum of $285, whichever Is greater.

“Whichever is greater” means that wealthier taxpayers will be required to pay 1% of their income, and as a result can easily wind up owing significantly more than $285. This doesn’t mean that millionaires would be fined tens of thousands of dollars. An affluent family’s penalty also is capped, at the average cost of bronze plans sold in state Exchanges nationwide.

If This Sounds Complicated, Turbo-Tax Makes it Simple

If, at this point, your eyes are glazing over, the good news is that you can calculate your penalty, quickly and easily, on Turbotax’s online calculator. Just type in your income, zip code, and the size of your household, and in about three minutes, TurboTax will tell you the size of your fine—and, most importantly, whether you might qualify for an exemption to the penalty.

Little Known “Hardship Exemptions”

for people who have experienced personal hardships such as domestic violence, substantial property damage from a fire or flood, from a fire or flood, the death of a close relative, a utility cut-off, or bankruptcy.